How do you measure the ‘value’ of an eCommerce website
Our conversion consultant recently conducted a study on the value of our eCommerce website. Considering visitors are up, conversion is down and YOY revenue is also down, this potentially paints a bleak outlook. So what has happened? Due to the newly aligned multi-channel approach adopted, the website is now required to be as much a lead generator as it is a booking channel. The web is not a sales tool, but a tool for the customer to use during the path-to-purchase. An online brochure.
So what does that mean? Focusing on what is best for your customer. This means giving the customer an option to book online or through the call centre. This means giving the customer full access to as much information as they need and to deliver the best brand experience through the website. Offer the customer the opportunity to subscribe to enews, request a brochure and to call. If that’s what they want to do…
So with this in mind, how do you measure the value of your website? I mean, in monetary terms. After all, investing money into your eCommerce website requires a commercial understanding of the ROI. So what is the ROI of a website which is no longer delivering as many sales? Is the website not performing due to sales and conversion tracking down YOY?
Measuring the value of your eCommerce website
Okay so you know the value of your online purchase. For the sake of arguement, your average order value is £100 (that’s GBP!). If you receive on average 50 orders a day, you make £5,000 a day. Great! But you’re down on last year’s average orders a day by 50%. Last year you took 100 orders a day and brought in £10,000 a day. So what’s gone wrong? Well what happened is that you now employ a multi-channel approach and have helped transfer business to your other channels (bricks and mortar shop, call centre…) by changing your online strategy to accommodate the customer’s need.
Whilst orders are down, you notice that the number of sales calls generated from the website are up from 10 a day to 100 a day. You also notice that more people are requesting catalogues. From 20 catalogues a day, you’re now shifting 200. Ok so what? Let’s say your web calls convert at 10% and you generate 10% sales from the brochure.
Therefore you can model the following:
100 calls converting at 40% = 40 bookings a day
200 catalog requests converting at 10% = 20 bookings a day
Those 60 extra bookings at an average value of £100 adds a potential £6,000 totaling revenue generated from the website at £11,000 – that’s £1,000 up on our fictional YOY comparison!
So you see, in order to evaluate the success of your eCommerce website, look further than the direct revenue generated and delve into the indirect revenue for the business